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194Q TDS ON PURCHASE OF GOODS

3959 views 6 replies

Tara Khandelwal

Student CA Final

298 Points Posted on 14 July 2021

Hello everyone

1) I have a query related to deduction of 194Q. Whether it has to be deducted on taxable value or invoice value inclusive of GST & Freight. Also some charge Freight along with goods purchased and GST is charged only on goods and not on freight.

What would be the Purchase value on which TDS @ 0.1%

2) Whether TDS under 194Q is deductible on Monthly electricity bill paid in excess of Rs.50 lacs ?

Replies (6)

Quick Summary

Under Section 194Q, TDS is applicable on purchase of goods exceeding the threshold. It is generally deducted on the value excluding GST if GST is shown separately in the invoice. Freight included in the same invoice is also part of purchase value. Electricity transactions are generally excluded from 194Q applicability.

CMA Poornima Madhava

CMA

13117 Points Posted on 14 July 2021

1) Tax to be deducted at source u/s 194Q on value excluding GST provided the GST portion is separately disclosed on the invoice. As I understand, TDS would apply even on freight charges.

2) As per CBIC circular, transactions in electricity is not covered under section 194Q. Though am not sure whether all such transactions are covered under this exception.

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 14 July 2021

Tax is to be charged on exclusive of GST.

I think not applicable on electricity bill u/s 194Q

Balamurali Unnithan MS

STUDENT

1631 Points Posted on 14 July 2021

As per the earlier clarification from department.
194 Q Apllucable to the taxable value.

KSEB -Govt.Undertaking -Presently on exemption list.

Vasudevan C P

403 Points Posted on 15 July 2021

Tax to deducted on payment without GST portion

Susmita Dutta, CA , CPA

2141 Points Posted on 15 July 2021

If the freight is included in the total invoice value then TDS u/s 194 Q is Applicable and if a separate freight and the incidental charges invoice is raised then excluded.

This section is not applicable to: transactions in electricity, renewable energy certificates and energy saving certificates traded through power exchanges registered in accordance with Regulation 21 of the CERCc

Ajit kumar Jha

Article assistant

24 Points Posted on 25 November 2022

As the section uses the word "goods" (Any person, being a buyer who is responsible for paying any sum to any resident (hereafter in this section referred to as the seller) for purchase of any goods of the value or aggregate of such value exceeding fifty lakh rupees.

so no TDS under this section shall be deducted on service amount.

Thanks & Regards

Ajit Jha